contrarian profits
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contrarian profits

The social profit generated by enterprise activities is the addition of economic profit or the external economic effect of the activity. Companies may make significant monetary profits, but external economic effects often result in negative results, and substantial social profits may be minimal. Such as the industrial revolution, the mass production of the factory is low cost and price of product, but in order to earn maximum profit, factory owners and lower production costs, lead to the low wages of child labor, as well as improper handling industrial waste or contaminants and other social burden. First of all, it costs transaction cost for the manufacturer to purchase intermediate products in the market. It includes the cost of seeking suitable suppliers, signing contracts and supervising contract execution. If the manufacturer can produce some intermediate products within the enterprise itself, it can eliminate or reduce some transaction costs, and can better guarantee the quality of the products. Second, if the manufacturers need is a special type of specialized equipment, the supplier does not generally willing to specialize in only a buyer of the product of the investment and production, because this kind of proprietary investment risk is bigger. Therefore, vendors that need this specialized device need to solve the problem of specialized devices within the enterprise. In the end, the manufacturers hire employees with specialized skills, such as specialized product design, cost management, and quality control, and establish long-term contractual relationships with them. This can be more beneficial than buying the corresponding services from other vendors, thereby eliminating or reducing the corresponding transaction costs. Modern economy, the interest rate as the price of money, not only restricted by many factors in the economic and social, and changes in interest rates to have a great impact on the economy as a whole, as a result, modern economists are studying the interest rate decision problem, pay special attention to the relationship between the variables and the balance of the economy as a whole, the interest rate decision theory has experienced the classical interest rate theory, Keynes's interest theory, interest rate in loanable funds theory and is-lm analysis as well as the contemporary evolution of dynamic interest rate model, the development process. It is our responsibility to achieve our goals in the right way in 2018, and we have this opportunity.